This invention relates generally to the management of a healthcare system, and, more specifically, to techniques for estimating charges for treating patients with defined primary and collateral illnesses.
There have been several statistical techniques proposed or implemented that have a goal of homogeneously grouping encounters of patients within the healthcare system by some measure of the outcome of the encounter, such as by the length of stay in a hospital or charges of the healthcare provider to render the healthcare services. Most of this effort has been directed to analyzing the resource consumption of in-patient (hospital) stays. Common to these systems is the categorization of each instance of the delivery of healthcare services into one of a large number, usually hundreds, of categories of illnesses and/or treatments. It is desired that the charges of all services in a given category be quite close to each other in order that an average of such charges can be used as a measure of what all services falling within that category should cost. That is, for example, when a patient is treated for one condition, such as congestive heart failure, an average of all charges for other patients treated for the same condition is taken as a measure of what the charges should be to treat this specific patient.
The United States government uses such a system of 470+ Diagnosis Related Groups ("DRGs") to reimburse healthcare providers under Medicare for hospital admissions. Many illnesses are defined by multiple DRGs that differ by an age range of the patient or whether there exists a co-morbidity or complication along with the principal diagnosis (the diagnosis which occasioned the admission). But this one separate category for the existence of any co-morbidity or complication does not take into account the large differences in the complexities of illnesses that can result among the large number of secondary or collateral conditions that are possible with any given primary illness. Health providers code diagnoses and procedures performed by use of the International Classification of Diseases--9th Revision, Clinical Modification ("ICD-9-CM"), approximately 15,000 different codes being in use. Each such code is grouped into individual ones of the DRG's, and a reimbursement amount associated with that DRG is then paid to the hospital or other health provider, no matter how more expensive than normal the treatment may be because of extraordinary secondary illnesses and the like.
It has long been recognized that there is a significant variation in the cost to treat patients within one category, so that the average is not a good predictor of what the charges for treating any particular patient will or should be. Therefore, there has been a significant effort to select categories and/or increase the number of categories to improve the homogeneity of the charges within each category. It has been thought that this is the way to obtain average charges that can be reliably used to estimate what the charges should be for the purpose of reimbursing the healthcare provider or determining expected charges that can be used to evaluate the efficiency of the healthcare provider. But such techniques have not sufficiently reduced the variation of charges in individual categories to bring about this result. It is not known what portion of the variations are due to differences in the level of illness of the patients and what is caused by differences in the efficiency or style of the healthcare providers. It is the efficiency of the healthcare providers that is desired to be quantified in order to manage them within a healthcare system.
A large body of medical literature documents that patients who are older, have more serious and complex illnesses which extend across multiple body systems (heart, lungs, etc.) are at greater risk of exhibiting higher mortalities, having poorer health and functional status, and consuming greater resources. Therefore, it is a principal object of the present invention to provide a technique of analyzing patients' health data that improves the ability to compare the performance of healthcare providers by significantly reducing variations between expected and actual outcomes (such as charges) due to differences in clinical complexity (severity of illness, and the existence and severity of co-morbid status) among the patients.
It is another principal object of the present invention to provide a technique for improving the accuracy of estimating likely charges (expenditure of resources) for treating a given patient.
It is a further object of the present invention to provide a technique for estimating the financial burden of each illness within each patient in such a way as to allow independent assessments of each illness.